Purchase goods from Rahul on the list price of Rs.50,000 for cash at 20% trade discount and received 3% cash discount. Amount credited to discount a/c :
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Answer:
the journal entry:
purchase a/c dr 40000
to cash a/c 38800
to discount given a/c 1200
Explanation:
as we dont enter the trade discount and only enter the cash discount into the books, the trade discount of 50000*20%=10000 is deducted from list price and calculated cash discount on it,(50000-10000)*3%=1200
now purchase price is 40000
and cas given is, 40000-1200=38800
thus discount considered is cash discount of 1200
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